“The more you invest in a governance structure for your [family office], the more you communicate and interact with the family members and the more you invest in the education of the next generation, the better the performance will be. Moreover, we found these families to be happier than others as they were able to balance their personal wealth with entrepreneurial creativity, philanthropy and leadership in society, and to serve as positive role models.”
This is quite a finding. Good governance in family offices contributes to family happiness as well as improved performance.
Family Office Governance
The governance needs of a family office will include policies for making investments and distributing income to family members and, if appropriate, the family’s involvement in philanthropy. It should also be clear which services the family office can provide and where family members need to rely on their own resources.
What is a Family Office?
Most literature on family offices focuses on the single family office and multi-family office service providers, but we also need to recognise that every enterprising family has to address how to manage the business of the family. And this is my practical definition of a family office; it is the way in which the business of a family is organised and administered.
By this standard, every enterprising family has a family office of sorts and no matter the size and complexity of your family office, good governance is still important.